RAISE YOUR HAND if you know what digital transformation is.
Hands still by your side? Don’t feel bad. Even industry experts admit to having trouble defining the phenomenon precisely. Indeed, for Larry Walsh, president and CEO of Port Washington, N.Y.-based advisory firm The 2112 Group, digital transformation calls to mind the Supreme Court’s famous description of obscenity.
“I know it when I see it,” he says.
Sometimes it looks like a warehouse in which robots and humans work seamlessly together to process orders in a fraction of the time previously required. Other times it looks like a retailer delivering personalized marketing messages to just the right customer at just the right time automatically. In every case, it looks like companies exploiting powerful, omnipresent technologies to reinvent processes in ways that radically increase speed, efficiency, and customer satisfaction.
It’s making a bunch of people a whole lot of money too. IDC expects global outlays on digital transformation technologies and services to rise 16.8 percent this year to more than $1.1 trillion.
You don’t have to be IBM to cash in on that spending either. Digital transformation may be hard to define but it’s a very real opportunity for IT providers of every size.
Sticky and Profitable
Part of what makes digital transformation so hard to pin down is the resemblance it bears—on the surface at least—to much older concepts. People have been digitizing analog processes for decades, after all.
According to Walsh and others, though, what’s happening now is different. Cloud vendors like Amazon, Microsoft, and Google have turned world-class data centers from something only large businesses can afford into practically limitless commodities available to anyone with a credit card. “We’re able to actually do things at scale and in a ubiquitous fashion that we never were able to do before,” Walsh observes.
Thanks to pervasive broadband and powerful mobile devices, today’s end users enjoy nonstop access to those resources too. “Technology is with them everywhere they go,” says Abby Warner, chief operating officer of The Brookfield Group, an integrator, MSP, and digital transformation specialist in Carmel, Ind. “They basically carry a computer around all the time in their cell phones.”
Add in increasingly sophisticated applications, often equipped with artificial intelligence, and you have a recipe for services and solutions that perform labor-intensive tasks almost instantaneously and without human assistance. “The software and the ability to automate workflows and processes is really what makes digital transformation happen,” Walsh says.
The end result is more than just efficiency, though. Digital transformation arms businesses to leave their competitors in the dust by providing entirely new experiences. “You can really recreate what it means to deliver customer service,” says Laurie McCabe (pictured), a partner and analyst at Boston-based analyst firm SMB Group Inc.
You can also invent whole new business models, she adds. Indeed, today’s potent mix of cloud-based infrastructure, high-speed connectivity, high-power mobile hardware, and self-learning software has turned companies like Uber and Airbnb from humble startups to corporate goliaths overnight. “There’s just so many instances of industries where things have been going along business as usual and all of a sudden somebody figures out how to use technology to do things better,” McCabe says.